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- Mitsui & Co., Ltd.
Corporate Communications Division
Mitsui & Co. Ltd. ("Mitsui") (Head Office : Tokyo, Japan, President and CEO: Masami Iijima) has today entered into an agreement with a pharmaceutical chemical intermediate / Active Pharmaceutical Ingredients ("API") manufacturer in India, namely Arch Pharmalabs Limited ("Arch") (Head Office: Mumbai, India), to acquire newly subscribed shares of approximately 5% of Arch at around 1.2 billion Yen (approximately 13Mil USD). Today's agreement with Arch makes Mitsui one of the first Japanese conglomerates to take a stake in an Indian CMO* (Contract Manufacturing Organization) in the industry.
Arch is a chemical intermediate and API manufacturer in India with a head office in Mumbai and possesses factories across the country. Arch has a diverse range of technology and is currently supplying its products to numerous leading multinational pharmaceutical companies based in the US, Europe and the Middle East, for drugs related to hypertension, hyperlipidemia, antibiotics and cancer amongst others.
Mitsui, with over 40 years of experience of business in this field, has been a solution provider to pharmaceutical companies with services ranging from supplying raw materials, chemical intermediates and APIs to supporting management of manufacturing as well as providing logistics service to pharmaceutical companies. Through this investment, Mitsui intends to strengthen the CMO business platform. Further this investment illustrates Mitsui's recognition of India as having a huge potential for manufacturing pharmaceutical chemical intermediates and APIs and the growing market demand in the Asia Pacific region.
The pharmaceutical industry as a whole is facing a "patent cliff" problem in the year 2010** where many of the so called "blockbuster drugs**" lose patent protection and are expected to encounter strong competition from generic products. Under the circumstances, many multinational companies are already moving into India and recognizing India as "a global factory" for the pharmaceutical industry with competitive technology and pricing, Mitsui, through this investment into Arch, hopes to take a further role to make a contribution to the industry by supplying key raw materials both in the Asia Pacific region and the world.
*CMO business is where pharmaceutical companies outsource the manufacturing function to an external company. Such outsourcing will result in cost-savings for the pharmaceutical companies and allow the resources to be allocated to the core R&D activities.
**"patent cliff" problem in the year 2010 - Many of the so called "blockbuster drugs" which are generally defined as products with a total revenue over USD 1bn worldwide, will lose patent protection and are expected to encounter strong competition from generic products. This phenomenon will put a large pressure on the profitability of the pharmaceutical companies.
|Company Name||Arch Pharmalabs Limited|
|Head Office||Mumbai, India|
|Chairman and Managing Director||Ajit Kamath|
|Shareholding(post Mitsui's allotment)||Promoter Group 34.27%, PE fund 43.28%, Mitsui 5.25%, Others 17.2%|
|Revenue||Approx. JPY 22bn (2010/3)|
|Share Capital||Approx. JPY 400Million|
|No. of employees||2,164 (As of May 31st 2010)|
|Business activities||Pharmaceutical chemical intermediate / API manufacturer, Contract Manufacturing.|
This press release includes forward-looking statements about Mitsui. These forward-looking statements are based on the current assumptions and beliefs of Mitsui in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. The risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest annual report on Form 20-F, which has been filed with the U.S. Securities and Exchange Commission.
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